Newcomers Experienced Marked Changes in the Labor Market Performance
According to the study, between the years 2006-2019 immigrants experienced great improvement in labor market outcomes.
In some instances, they even perform better than Canadian-born workers. The study found that newcomers are on average better educated and younger than Canadian-born workers in the labor market, which published in a report titled The Improved Labour Market Performance of New Immigrants to Canada, 2006-2019.
Economists compared the employment rate, participation rate, hourly wages and as well as unemployment rates of three groups: most recent newcomers who had been in Canada for less than 5 years, recent immigrants who resided in the country for more than 5 years but less than 10 years and Canadian-born citizens.
Researchers collected the data from Statistics Canadas’ Labour Force Study, conducted between 2006 and 2019, and reported by the Center for the Study of Living Standards.
While the participation rate and employment rates were higher for immigrants, still, there was a wage gap and higher unemployment rates.
By the end of the 13 year period, newcomers had more participation and employment rate than Canadian-born workers.
For very recent immigrants, immigrant participation rates in 2019 surpassed the Canadian-born by 4.5 percent and 10 percent for recent immigrants respectively.
The employment rates of very recent immigrants were 1.5 percentage points higher than those of Canadian-born workers, while recent immigrants were 8.7 percentage points higher than the latter.
While the unemployment rates for immigrants decreased, they were still higher than those of Canadian-born workers.
In 2019, both very recent and new immigrants’ unemployment levels were 4.0 and 1.0 percentage points higher than those of the Canadian-born, respectively.
While the hourly wages were adjusted for living expenses for very recent immigrants increased, immigrants nevertheless paid less than the Canadian born between $2.87 and $4.32 an hour.
Six reasons why immigrants have better results
There were six factors for the general improvement in the performance of new immigrants on the labor market according to the report:
- more immigrants had university degrees;
- Late 2010 strong labor market could have benefited immigrants more than Canadian-born workers;
- Federal and provincial programs for immigrant workers, such as the Provincial Nominee Program (PNP), undoubtedly contributed to the success of the workforce;
- Support services could have strengthened labor market integration; and
- foreign credential recognition could have improved
Better labor market knowledge may have helped immigrants better prepare for Canada’s labor market
Room for improvement
Furthermore, there were two main reasons for the weaker relative income growth as especially in comparison to other labor market factors:
- Immigrants in Canada have to face problems such as discrimination, language barriers, and Fewer social networks may have more impact on earnings than on employment; and
- Job discrepancies, where university-trained people work in a job irrelevant to their studies, have not changed, which may indicate why the relative wages of highly skilled immigrants have not changed.
“Despite their lower average age and higher education compared to the Canadian working-age population, new immigrants are a significant strength for the Canadian economy, and an even greater contribution could be made if the differences in unemployment rates and relative wages were further decreased”, study said.